CAMBODIA: Rubber exports rise, but prices stay flat

Rubber exports from Cambodia were up over 17 per cent in the first quarter of 2013, but the revenue from rubber stayed steady as prices decline worldwide, according to data from the Ministry of Commerce.

The data showed that in the first quarter of this year, total export increased to 15,019 tonnes from 12,805 tonnes in the same period last year. However, the price of rubber decreased sharply, by USD461 per tonne for the three-month period, from USD3,216.52 per tonne in the early part of the year, to $2,755.34 by the end of the quarter. Total revenue reached USD41,382,434 so far this year, compared with USD41,187,582 the previous year.

Local rubber producers say rubber demand is still growing, as is supply, as a result of new mature rubber trees in the region, and the prices will be difficult to sustain.

Heng Sreng, general director of Long Sreng International Co Ltd and owner of Boeung Keth, which covers over 7,000 hectares of rubber plantations in Kampong Cham province, said that the problem of the decline in prices is the result of new countries entering the market.

He said many countries, including Cambodia, Laos, Thailand and Vietnam, are producing ever more rubber for export; before, it was mainly Malaysia and Indonesia producing for world markets.

He said, “I think the price would not be higher than this though the demand is high in the world markets because many new mature rubber trees are being harvested in many countries, so they can supply.”

He added: “I am concerned that price of rubber continues to decline and cost of production is increasing, such as labour costs,” adding that he planned to export between 15 per cent and 20 per cent more, to 3,000 or 3,500 tonnes compared to previous year, when he exported about 2,800 tonnes.

Mak Kimhong, director general of the Chup rubber plantation and president of the Rubber Plantation Association said that current prices have made it difficult for commercial companies to make a profit. “Rubber prices will continue to drop, but the real situation is difficult to speculate on,” he said.

In a Ministry of Commerce workshop, the Kingdom’s Minister of Commerce Cham Prasidh said Cambodia needed to diversify export products from garments to agricultural products, particularly rubber.

He said Cambodia has provided several tens of thousands of hectares of land to the private sector to invest in planting rubber trees in several provinces such as in Preah Vihear, Kampong Thom, Siem Reap and other provinces in the northeast of the country.

He said rubber helps the industrial sector very much because most cars spare parts were produced with rubber.

Prime Minister Hun Sen said at the 2013 Cambodia Outlook 7th Conference in February this year that the agricultural sector, particularly rubber, would play a successful role in the diversification of agricultural production.

Rennovia Inc. and Johnson Matthey announced that they have entered into a joint development agreement for the co-development and manufacture of catalysts to be used in the scale-up and commercialisation of Rennovia’s process for the production of bio-based glucaric acid and adipic acid.